Medicare Payment Update Charles FontenotNPA Director of

Reimbursement Policy

Jill SzydlowskiSenior Information Analyst

Department of Public Health SciencesUniversity of Rochester Medical Center

Session Objectives

bull Medicare Payment Updatebull Risk Adjustment Methodologybull 2011 through 2015 Experiencebull Looking Ahead to 2016

bull Medicare ESRD Payment Updatebull Risk Adjustment Methodologybull 2011 through 2015 Experiencebull Looking Ahead to 2016

2

CMS-HCC Risk Adjustment Models

bull CMS-HCC for Parts A and B (aka Part C) non-ESRD beneficiaries and functioning graft patients

bull CMS-HCC ESRD for Part C dialysis and transplant patients

bull Rx-HCC for Part D

3

Medicare Risk Adjustment Components

bull County Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull MA Coding Intensity Adjustmentbull Frailty Adjuster

Note Frailty Adjustor not applied to LTI or ESRD

4

Frailty Adjustment

bull Accounts for variations in PACE participantsrsquo Medicare costs not explained by the CMS-HCC model

bull Organizational-level frailty adjuster added to HCC risk score for community-based and ldquonew enrolleesrdquo

bull Frailty adjuster based on functional impairments reported by each PACE organizationrsquos enrollees on Health Outcomes Survey-Modified (HOS-M)

5

Part C Risk Score and Payment Calculation

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Adjusted Risk Score with Frailty = Adjusted Risk Score + Frailty Factor

bull Risk Adjusted Payment = Monthly Capitation Rate Adjusted Risk Score with Frailty

6

County payment rates CY2016

bull County payment rates are the greater ofndash prior yearrsquos rates trended forward (using MA Growth

rate) ndash average per capita fee-for-service payment amounts

bull Payment rates vary significantly across counties eg in 2016 (rounded)

ndash Miami FL (Dade county) $1418ndash New Orleans LA (Orleans county) $1212ndash Oakland CA (Alameda county) $1028ndash Pittsburgh PA (Allegheny county) $ 913ndash Portland OR (Multnomah county) $ 871ndash Big Stone Gap VA (Wise county) $ 786

7

Sample CMS-HCC Risk Score Calculation

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

8

Example of Payment Calculation for Community Enrollee

bull HCC Adjusted Risk Score = 217bull Frailty Adjuster = 105bull County Payment Rate = $84521 bull Payment = (217 + 105) $84521 = $192285

After normalization and coding intensity adjustment

9

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Session Objectives

bull Medicare Payment Updatebull Risk Adjustment Methodologybull 2011 through 2015 Experiencebull Looking Ahead to 2016

bull Medicare ESRD Payment Updatebull Risk Adjustment Methodologybull 2011 through 2015 Experiencebull Looking Ahead to 2016

2

CMS-HCC Risk Adjustment Models

bull CMS-HCC for Parts A and B (aka Part C) non-ESRD beneficiaries and functioning graft patients

bull CMS-HCC ESRD for Part C dialysis and transplant patients

bull Rx-HCC for Part D

3

Medicare Risk Adjustment Components

bull County Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull MA Coding Intensity Adjustmentbull Frailty Adjuster

Note Frailty Adjustor not applied to LTI or ESRD

4

Frailty Adjustment

bull Accounts for variations in PACE participantsrsquo Medicare costs not explained by the CMS-HCC model

bull Organizational-level frailty adjuster added to HCC risk score for community-based and ldquonew enrolleesrdquo

bull Frailty adjuster based on functional impairments reported by each PACE organizationrsquos enrollees on Health Outcomes Survey-Modified (HOS-M)

5

Part C Risk Score and Payment Calculation

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Adjusted Risk Score with Frailty = Adjusted Risk Score + Frailty Factor

bull Risk Adjusted Payment = Monthly Capitation Rate Adjusted Risk Score with Frailty

6

County payment rates CY2016

bull County payment rates are the greater ofndash prior yearrsquos rates trended forward (using MA Growth

rate) ndash average per capita fee-for-service payment amounts

bull Payment rates vary significantly across counties eg in 2016 (rounded)

ndash Miami FL (Dade county) $1418ndash New Orleans LA (Orleans county) $1212ndash Oakland CA (Alameda county) $1028ndash Pittsburgh PA (Allegheny county) $ 913ndash Portland OR (Multnomah county) $ 871ndash Big Stone Gap VA (Wise county) $ 786

7

Sample CMS-HCC Risk Score Calculation

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

8

Example of Payment Calculation for Community Enrollee

bull HCC Adjusted Risk Score = 217bull Frailty Adjuster = 105bull County Payment Rate = $84521 bull Payment = (217 + 105) $84521 = $192285

After normalization and coding intensity adjustment

9

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

CMS-HCC Risk Adjustment Models

bull CMS-HCC for Parts A and B (aka Part C) non-ESRD beneficiaries and functioning graft patients

bull CMS-HCC ESRD for Part C dialysis and transplant patients

bull Rx-HCC for Part D

3

Medicare Risk Adjustment Components

bull County Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull MA Coding Intensity Adjustmentbull Frailty Adjuster

Note Frailty Adjustor not applied to LTI or ESRD

4

Frailty Adjustment

bull Accounts for variations in PACE participantsrsquo Medicare costs not explained by the CMS-HCC model

bull Organizational-level frailty adjuster added to HCC risk score for community-based and ldquonew enrolleesrdquo

bull Frailty adjuster based on functional impairments reported by each PACE organizationrsquos enrollees on Health Outcomes Survey-Modified (HOS-M)

5

Part C Risk Score and Payment Calculation

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Adjusted Risk Score with Frailty = Adjusted Risk Score + Frailty Factor

bull Risk Adjusted Payment = Monthly Capitation Rate Adjusted Risk Score with Frailty

6

County payment rates CY2016

bull County payment rates are the greater ofndash prior yearrsquos rates trended forward (using MA Growth

rate) ndash average per capita fee-for-service payment amounts

bull Payment rates vary significantly across counties eg in 2016 (rounded)

ndash Miami FL (Dade county) $1418ndash New Orleans LA (Orleans county) $1212ndash Oakland CA (Alameda county) $1028ndash Pittsburgh PA (Allegheny county) $ 913ndash Portland OR (Multnomah county) $ 871ndash Big Stone Gap VA (Wise county) $ 786

7

Sample CMS-HCC Risk Score Calculation

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

8

Example of Payment Calculation for Community Enrollee

bull HCC Adjusted Risk Score = 217bull Frailty Adjuster = 105bull County Payment Rate = $84521 bull Payment = (217 + 105) $84521 = $192285

After normalization and coding intensity adjustment

9

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Medicare Risk Adjustment Components

bull County Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull MA Coding Intensity Adjustmentbull Frailty Adjuster

Note Frailty Adjustor not applied to LTI or ESRD

4

Frailty Adjustment

bull Accounts for variations in PACE participantsrsquo Medicare costs not explained by the CMS-HCC model

bull Organizational-level frailty adjuster added to HCC risk score for community-based and ldquonew enrolleesrdquo

bull Frailty adjuster based on functional impairments reported by each PACE organizationrsquos enrollees on Health Outcomes Survey-Modified (HOS-M)

5

Part C Risk Score and Payment Calculation

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Adjusted Risk Score with Frailty = Adjusted Risk Score + Frailty Factor

bull Risk Adjusted Payment = Monthly Capitation Rate Adjusted Risk Score with Frailty

6

County payment rates CY2016

bull County payment rates are the greater ofndash prior yearrsquos rates trended forward (using MA Growth

rate) ndash average per capita fee-for-service payment amounts

bull Payment rates vary significantly across counties eg in 2016 (rounded)

ndash Miami FL (Dade county) $1418ndash New Orleans LA (Orleans county) $1212ndash Oakland CA (Alameda county) $1028ndash Pittsburgh PA (Allegheny county) $ 913ndash Portland OR (Multnomah county) $ 871ndash Big Stone Gap VA (Wise county) $ 786

7

Sample CMS-HCC Risk Score Calculation

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

8

Example of Payment Calculation for Community Enrollee

bull HCC Adjusted Risk Score = 217bull Frailty Adjuster = 105bull County Payment Rate = $84521 bull Payment = (217 + 105) $84521 = $192285

After normalization and coding intensity adjustment

9

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Frailty Adjustment

bull Accounts for variations in PACE participantsrsquo Medicare costs not explained by the CMS-HCC model

bull Organizational-level frailty adjuster added to HCC risk score for community-based and ldquonew enrolleesrdquo

bull Frailty adjuster based on functional impairments reported by each PACE organizationrsquos enrollees on Health Outcomes Survey-Modified (HOS-M)

5

Part C Risk Score and Payment Calculation

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Adjusted Risk Score with Frailty = Adjusted Risk Score + Frailty Factor

bull Risk Adjusted Payment = Monthly Capitation Rate Adjusted Risk Score with Frailty

6

County payment rates CY2016

bull County payment rates are the greater ofndash prior yearrsquos rates trended forward (using MA Growth

rate) ndash average per capita fee-for-service payment amounts

bull Payment rates vary significantly across counties eg in 2016 (rounded)

ndash Miami FL (Dade county) $1418ndash New Orleans LA (Orleans county) $1212ndash Oakland CA (Alameda county) $1028ndash Pittsburgh PA (Allegheny county) $ 913ndash Portland OR (Multnomah county) $ 871ndash Big Stone Gap VA (Wise county) $ 786

7

Sample CMS-HCC Risk Score Calculation

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

8

Example of Payment Calculation for Community Enrollee

bull HCC Adjusted Risk Score = 217bull Frailty Adjuster = 105bull County Payment Rate = $84521 bull Payment = (217 + 105) $84521 = $192285

After normalization and coding intensity adjustment

9

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Part C Risk Score and Payment Calculation

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Adjusted Risk Score with Frailty = Adjusted Risk Score + Frailty Factor

bull Risk Adjusted Payment = Monthly Capitation Rate Adjusted Risk Score with Frailty

6

County payment rates CY2016

bull County payment rates are the greater ofndash prior yearrsquos rates trended forward (using MA Growth

rate) ndash average per capita fee-for-service payment amounts

bull Payment rates vary significantly across counties eg in 2016 (rounded)

ndash Miami FL (Dade county) $1418ndash New Orleans LA (Orleans county) $1212ndash Oakland CA (Alameda county) $1028ndash Pittsburgh PA (Allegheny county) $ 913ndash Portland OR (Multnomah county) $ 871ndash Big Stone Gap VA (Wise county) $ 786

7

Sample CMS-HCC Risk Score Calculation

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

8

Example of Payment Calculation for Community Enrollee

bull HCC Adjusted Risk Score = 217bull Frailty Adjuster = 105bull County Payment Rate = $84521 bull Payment = (217 + 105) $84521 = $192285

After normalization and coding intensity adjustment

9

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

County payment rates CY2016

bull County payment rates are the greater ofndash prior yearrsquos rates trended forward (using MA Growth

rate) ndash average per capita fee-for-service payment amounts

bull Payment rates vary significantly across counties eg in 2016 (rounded)

ndash Miami FL (Dade county) $1418ndash New Orleans LA (Orleans county) $1212ndash Oakland CA (Alameda county) $1028ndash Pittsburgh PA (Allegheny county) $ 913ndash Portland OR (Multnomah county) $ 871ndash Big Stone Gap VA (Wise county) $ 786

7

Sample CMS-HCC Risk Score Calculation

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

8

Example of Payment Calculation for Community Enrollee

bull HCC Adjusted Risk Score = 217bull Frailty Adjuster = 105bull County Payment Rate = $84521 bull Payment = (217 + 105) $84521 = $192285

After normalization and coding intensity adjustment

9

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Sample CMS-HCC Risk Score Calculation

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

8

Example of Payment Calculation for Community Enrollee

bull HCC Adjusted Risk Score = 217bull Frailty Adjuster = 105bull County Payment Rate = $84521 bull Payment = (217 + 105) $84521 = $192285

After normalization and coding intensity adjustment

9

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Example of Payment Calculation for Community Enrollee

bull HCC Adjusted Risk Score = 217bull Frailty Adjuster = 105bull County Payment Rate = $84521 bull Payment = (217 + 105) $84521 = $192285

After normalization and coding intensity adjustment

9

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Medicare Risk Scores in PACE 2011ndash2015

238 240 245 244254

10

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Frailty Adjusters in PACE 2011-2015

0000

0050

0100

0150

0200

0250

0300

0350

2010 2011 2012 2013 2014 2015 2016Year

212

052

156 148158

11

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Medicare Part AampB PMPM Payments to PACE 2011-2015

$0

$500

$1000

$1500

$2000

$2500

$3000

$3500

2010 2011 2012 2013 2014 2015 2016Year

$2083$2050$2236$2241$2180

12

Payments are averages across all beneficiaries

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Risk Scores Components by PACE Site August 2015

0000

0500

1000

1500

2000

2500

3000

3500

4000

Demographic Component HCC Component Frailty Factor

PACE Average

13

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

of Enrollees with 0 and 4+ HCCs by PACE Site August 2015

14

0

100

200

300

400

500

600

700

800

900

1000

Percent with 0 HCCs Percent with 4+ HCCs

Average Risk Score for this PACE Site = 333

Average Risk Score for this PACE Site = 153

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Distribution of Most Prevalent HCCs for the Top 20 Most Costly PACE Participants August 2015

69

58 58 56 5549 49

44 43 42

30 28 27 26 25 24 22 20

0

10

20

30

40

50

60

70

80

15

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Looking Ahead What Changes in 2016

Normalization Factor for PACE

will increase from 1028 to 1042

MA Coding Intensity

Adjustment will increase from

516 to 541

MA Growth Rate will increase from - 407 to 504

16

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Looking Ahead What Doesnrsquot Change in 2016

1) PACE will retain the current CMS HCC Risk Adjustment model (v21)

2) Frailty Adjuster Factors will be the same as in 2015

Example Calculation of a site-specific frailty adjuster

ADL Count Non-Medicaid Medicaid

0 -0062 -0189

1-2 0152 0000

3-4 0272 0147

5-6 0272 0380

ADL Count Non-Medicaid Medicaid Total

0 02 (-062) = -0000124 134 (-189) = -0025326

1-2 03 152 = 00456 236 0 = 000

3-4 04 272 = 002568 240 147 = 03528

5-6 08 272 = 002176 373 380 = 14174

Frailty Adjuster 00918 151694 0161

Percentages in each cell

are the results of the

HOS-M Survey

17

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Relationship to Payment

bull Direct Relationship ndashHigher Factor Increases Payment

bull PACE County Payment Ratebull Medicare Growth Rate

bull Participantrsquos HCC Risk Score

bull Frailty Adjustor

bull Inverse Relationship ndashHigher Factor Decreases Payment

bullNormalization Factor

bullMA Coding Pattern Differences Adjustment

18

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

How Do These Changes Affect Risk Scores And Payments

An In

crea

se in

N

orm

aliza

tion

Fact

or

Will Decrease Risk Scores

Will Increase County Risk Rates

An In

crea

se in

M

A Gr

owth

Rat

e

An In

crea

se in

MA

Codi

ng In

tens

ity

Adju

ster

Net Estimate Approximately 3 increase in Payments to PACE

HCC Model v21 and Frailty Factors are unchanged

19

Increases Payment

Decreases Payment

If coding held constant

+

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Estimated Impact of 2016 Payment Changes

bull PACE organizationsrsquo average county benchmark payment amount increased by 345

2015 = $85795 2016 interim = $90119

bull PACE participantsrsquo average total risk scores decreased by approximately 16

2015 = 243 2016 interim = 239

bull In general PACE organizationsrsquo interim PMPM payments will increase due to a higher MA Growth Factor

2015 = $226679 2016 interim = $234495

20

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Impact of Sequestration

bull Sequestration continues into 2016

ndash 2 reduction to Medicare Part C paymentsbull Applies to what CMS would have otherwise paid

under current lawbull Not cumulative year to year

ndash Shown in Monthly Plan Payment Reports

21

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Looking Ahead Coding Intensity

bull CMS is reviewing the Medicare Advantage coding intensity adjustment methodology

bull MedPAC recently analyzed the impact of home assessments on Medicare Advantage risk scores

bull CMS concerned the methodology and the use of home assessments overstates the acuity of MA relative to FFS

22

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

bull Who are Enrollees with ESRD

For the purpose of MA payment ldquoESRD beneficiariesrdquo means beneficiaries with ESRD whether entitled to Medicare because of ESRD disability or age and includes beneficiaries in dialysis transplant and post-transplant functioning graft statuses

23

Overview of ESRD Program

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

bull CMS ESRD Payment Options

Since CY 2006 CMS has had the authority to determine whether and how to incorporate costs for ESRD enrollees into the bidding methodology per regulation

To date ESRD enrollee costs have not been included in plan bids for non-prescription drug benefits and CMS continues to pay MA organizations for ESRD plan enrollees using the MA capitation rates

24

Overview of ESRD Program

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Overview of ESRD Payment Model

bull The ESRD CMS-HCC model differs significantly from the CMS-HCC risk adjustment model used for payment for non-ESRD enrollees

bull The ESRD model is a three-part model that distinguishes payments for

- dialysis patients - patients receiving kidney transplants - beneficiaries with functioning kidney grafts

25

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Risk Adjustment Model for Dialysis Patients

bull The risk factors in this model reflect disease and expenditure patterns specific to dialysis patients

bull Patientsrsquo risk scores are multiplied by a statewide rate (in contrast to county rates used for non-ESRD enrollees)

26

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Risk Adjustment Model for Transplant Patients

bull Recognizing the high one-time cost of a transplant CMS makes payments over three months to cover the transplant and immediate subsequent services

bull As with dialysis patients payments for transplant patients are calculated using statewide rates

27

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Risk Adjustment Model for Functioning Graft Beneficiaries

bull Risk adjustment for these beneficiaries is based on the CMS-HCC risk model for the general population although a few HCCs have been removed and extra terms have been added specific to being in functioning graft status eg to recognize Medicare coverage of immunosuppressive drugs

bull The functioning graft payment automatically begins the month after the third transplant payment unless an enrollee has returned to dialysis

bull As is the case with the CMS-HCC risk model for non-ESRD enrollees payments are calculated using county payment rates

28

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

29

ESRD Risk Adjustment Components

bull State Benchmark Payment Ratebull Participantrsquos HCC Risk Scorebull Normalization Factorbull County Benchmark Payment Ratebull MA Coding Intensity Adjustment

Used in Post-Graph Model only

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

30

CMS-HCC ESRD Risk Score and Payment Calculation (Dialysis)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Risk Adjusted Payment = State Base Rate Adjusted Risk Score

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

State Payment Rates CY2016

bull Payment rates vary significantly across states eg in 2016 (rounded)

ndash New Jersey $8269ndash Pennsylvania $7210ndash Texas $6980ndash Oklahoma $6482ndash Iowa $6014ndash North Dakota $5472

31

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Example CMS-HCC ESRD Risk Score Calculation (Dialysis)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Adjusted Risk Score = (2351028) = 2285

32

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Example of Payment Calculation for Community Enrollee (Dialysis)

bull HCC Adjusted Risk Score = 2285bull State Payment Rate = $8269 (New Jersey) bull Payment = 2285 $8269 = $18895

After normalization

33

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

34

CMS-HCC ESRD Risk Score and Payment Calculation (Post-Graph)

bull Raw Risk Score = Demographic Relative Factors + Disease Relative Factors

bull Normalized Risk Score = Raw Risk ScoreNormalization Factor

bull Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score (1 ndash MA Coding Intensity Factor)

bull Risk Adjusted Payment = County Base Rate Adjusted Risk Score

Coding Intensity Adjustment only applies to Post-Graft Model

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Example CMS-HCC ESRD Risk Score Calculation (Post-Graph)

Community Resident bull 82 year-old woman 517bull Medicaid eligible 213bull CHF (HCC85) 361bull COPD (HCC111) 388bull Dementia (HCC 51) 616 bull CHF_COPD (INT4) 255Unadjusted Risk Score = 235bull Normalization Factor 1028Normalized Risk Score = (2351028) = 2285bull MA Coding Intensity Adjustment 516Adjusted Risk Score = 2285 (1-0516) = 217

35

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Example of Payment Calculation for Community Enrollee (Post-Graph)

bull HCC Adjusted Risk Score = 217bull County Payment Rate = $971 (Camden Co NJ)bull Payment = 217 $971 = $2107

After normalization and coding intensity adjustment

36

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

ESRD Payment in CY 2016

bull No change in CMS-HCC ESRD models (dialysis transplant functioning graft)

bull Normalization factors for the CMS-HCC ESRD models in 2016ndash Dialysis model 0990ndash Functioning graft model 1042

bull In PACE states ESRD rates increased an average 35

37

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Summary of ESRD Groups in PACEbull ESRD Group identifies the various types of ESRD enrollees enrolled in PACE

organizations bull Dialysis bull Functioning Graft and bull ESRD MSP

bull Dialysis and functioning graft enrollees are described above

bull ESRD MSP enrollees are those beneficiaries for whom Medicare is a secondary payer and for whom Medicare payments are reduced substantially as a result

bull In all cases ESRD MSP enrollees are dialysis patients

bull Based on a review of the July MMRs for the period 2011-2015 there were no PACE enrollees identified as transplant patients

bull Although it is possible that a kidney transplant patient may have been enrolled in PACE sometime other than the month of July during this five-year period NPA staff are not aware of this having occurred

38

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

ESRD GroupsPopulation in PACE

392460 508

634713

0

200

400

600

800

2011 2012 2013 2014 2015

Dialysis

Dialysis Participants

1620 20

2632

0

10

20

30

40

2011 2012 2013 2014 2015

Functioning Graft

Functioning Graft Participants

34

2 2

00

2

4

6

2011 2012 2013 2014 2015

MSP-TransplantDialysis

MSP-TransplantDialysis Participants

39

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Average ESRD PMPM in PACE

$8174

$9254$8638 $8562 $8682

$3365 $3121 $3227 $3391$3708

$1568 $1602 $1391

$2482

$0$0

$1000

$2000

$3000

$4000

$5000

$6000

$7000

$8000

$9000

$10000

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

40

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Average ESRD Risk Scores in PACE

1239 1266 1215 1236 1278

3971

3664 3575 3673

4133

1082 10790936

1716

00

05

1

15

2

25

3

35

4

45

2011 2012 2013 2014 2015

Dialysis Functioning Graft MSP-TransplantDialysis

41

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

411

484530

662

745

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

All ESRD Types

All ESRD Types

All Type ESRD vs Total PACE Enrollment 2011-2015

2278825443

28255

3165434413

0

5000

10000

15000

20000

25000

30000

35000

40000

2011 2012 2013 2014 2015

Total PACE population

Total PACE population

42

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Flow Chart of ESRD PaymentsPACE Center Participant

Reduced kidney function

Renal Center Form 2728

Dialysis Model

Dialysis Model

Kidney Transplant Eligible

Transplant Payments

Transplant Successful

Functioning Graph Model

CMS-HCC Model

3 months ndash 50 25 25

4th month

Yes

Yes

Yes No

No No

43

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Looking Ahead - ESRDbull On June 26 2015 CMS issued a proposed rule that will update payment

policies and rates under the ESRD PPS for dialysis services furnished on or after January 1 2016

bull This rule also proposes new quality and performance measures to improve the quality of care by dialysis facilities treating patients with ESRD

bull This proposed rule also includes changes to the ESRD Quality Incentive Program for payment years 2017-2019 under which payment incentives are applied to dialysis facilities to improve the quality of dialysis care

bull Under the ESRD QIP facilities that do not achieve a minimum total performance score with respect to quality measures established in regulation receive a reduction in their payment rates under the ESRD PPS

bull Final rule should be published in late Octoberearly November

44

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Encounter Reporting Update

bull Currently there are 2 drivers

bull Federal ndash CMS continues to devise ways to adjust the current payment model

bull States ndash Trending towards full Managed Care for Medicaid (ie New York California Wisconsin Kansas)

45

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Encounter Reporting Update

bull NPA has continued to voice concerns towards encounter reporting requirements and PACE recognizing that this requirement is an ill fit and antithetical to the PACE model of care

bull NPA is encouraged by continuing conversations with CMS and their increasing understanding of the uniqueness of the PACE model and its differences as compared to MA Plans

46

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Encounter Reporting Updatebull PACE organizations are currently only required to submit encounter data for services in

which they have claims

bull There are currently NO requirements for encounter reporting for internal services for PACE CMS has stated to NPA that there would be NO requirement for internal encounter reporting before 112017

bull In the interim NPA developed the Professional Superbills as a means for POs to begin becoming accustomed to documenting and submitting this information and to assist them in constructing the organizational infrastructure to do so

bull Utilizing the professional superbills NPA suggests that POrsquos begin blending these with the claims already being submitted to CMS

bull This will allow POrsquos to build into their existing systems a methodology for capturing and submitting the information well in advance of when CMS requires full-on encounter reporting

47

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Encounter Reporting Update

bull From the 2016 Advance Notice of Payment concerning Encounter Data Reporting and PACE

ldquoFor PACE organizations we propose to continue the same method of calculating risk scores as used for the 2015 payment year which is to use diagnoses from the following sources in equal measure (with no weighting) (1) Encounter Data System (EDS) data valid for risk adjustment with 2015 dates of service (2) Risk Adjustment Processing System (RAPS) data valid for risk adjustment with 2015 dates of service and (3) Diagnoses from FFS claims valid for risk adjustmentrdquo

bull Confirmed in the 2016 Final Notice of Payment

ldquoEncounter Data as a Diagnosis Source for 2016 As proposed in the 2016 Advance Notice CMS will blend the risk scores weighting the risk score from Risk Adjustment Processing System (RAPS) and FFS by 90 and the risk score from the Encounter Data System (EDS) and FFS by 10rdquo This statement confirms the proposal made in the Advance Notice There will be NO blendingweighting of risk scores for PACE in 2016

48

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Looking Ahead -Encounter Data Reporting

bull Encounter Data Reporting and PACE- Federal CMS continues its push to fully utilize EDR for risk adjustment

- States Effort continues towards the Managed Care Model in the absence of FFS data in establishing Medicaid rates increasingly reliant on EDS

- Medicaid Managed Care proposed rule heavily influenced by the Transformed-Medicaid Statistical Information System (T-MSIS)

bull NPA is developing a Medicaid rate-setting workgroup that will assemble a series of inter- related issues that should be considered by state policy makers and PACE organization when negotiating rates

49

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Looking Ahead -Medicaid Managed Care Proposed Rule

50

bull PACE organizations are not subject to the sections of the code modified in the Medicaid Managed Care Proposed Rule Nonetheless as PACE organizations function alongside compete with and serve many of the same populations as the managed care organizations subject to this rule PACE organizations are directly and indirectly affected by these changes

bull NPA believes it is important for the Medicaid Managed Care Proposed Rule to support the alignment of Medicaid managed care plans with PACE With this goal in mind NPA offered comments and recommendations on the issues that most directly impact PACE and its ability to serve frail vulnerable populations

bull NPA provided comments on the following issues and are awaiting a response from CMSndash Actuarial Soundness Rate Setting and Medical Loss Rationdash Options Counselingndash Enrollment and Disenrollmentndash Marketingndash Appeals and Grievancesndash Quality Measurement and Improvement External Quality Reviewndash Enrollee Encounter Data

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Additional Resources bull 2016 Final Notice of Payment

httpswwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2016pdf

bull ESRD Announcement of CY 2012 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies

and Final Call Letter Attachment VI for current ESRD CMS-HCC model risk factorshttpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAnnouncement2012pdf

2012 Risk Adjustment Regional Technical Assistance Participant Guide httpwwwcsscoperationscominternetcssc3nsfdocsCatCSSC~CSSC20Operations~Risk20Adjustment20Processing20System~Trainingopenampexpand=1ampnavmenu=Risk^Adjustment^Processing^System||

Advance Notice of Methodological Changes for CY 2005 Medicare Advantage Payment Rates pp 3-6 for description of ESRD CMS-HCC model httpwwwcmsgovMedicareHealth-PlansMedicareAdvtgSpecRateStatsDownloadsAdvance2005pdf

Medicare Managed Care Manual Chapter 7 ndash Risk Adjustment httpwwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c07pdf

Medicare Managed Care Manual Chapter 8 ndash Payments to Managed Care OrganizationshttpswwwcmsgovRegulations-and-GuidanceGuidanceManualsdownloadsmc86c08pdf

51

Contact Information

Charles FontenotDirector ReimbursementNational PACE Association675 N Washington Street Suite 300Alexandria VA 22314CharlesFnpaonlineorgPh 703-535-1558 Fax 703-535-1566

Jill SzydlowskiSenior Information AnalystDept of Public Health SciencesUniversity of Rochester Medical Center(585) 275-3394Jill_Szydlowskiurmcrochesteredu

52